The best books on globalization this year offer insights into three directional trends that are changing the topology of global trade and influence: the deepening of regional ties across emerging markets; the continuing rise of powerful new global players; and, finally, the intractability of risk factors inherent in emerging markets and regional networks, and how best to analyze them. Indeed, as the United States loses its hegemony as the primary engine of global growth, the new drivers of growth deserve intense examination.

New Ties That Bind

Traditionally, the West has myopically viewed globalization from the perspective of how its influence has spread eastward, but globalization also entails the deepening of economic, political, and demographic ties between any two regions, not just between the countries in the Organisation for Economic Co-operation and Development (OECD) and the rest of the world. The simultaneous rise of the economies of China and the Persian Gulf region, for example, is no coincidence. They are intimately connected and contributors to one another’s rising prosperity, as skillfully described in this year’s best book on globalization, Ben Simpfendorfer’s The New Silk Road: How a Rising Arab World Is Turning Away from the West and Rediscovering China.

Simpfendorfer, a Royal Bank of Scotland economist based in Hong Kong, has the unique vantage point of having worked in Damascus and Dubai, as well as in many countries in East Asia. He uses the southern Chinese city of Yiwu as a microcosm for the reopening of the Silk Road. Until recently an out-of-the-way village, Yiwu is a revealing node because its residents make their fortunes selling cheap “made in China” goods to the developing world, not to the U.S. and Europe.

Yiwu’s rise as a trade center — its annual trade fair drew 3 million visitors in 2007 — and the repaving of the Silk Road are due in part to the United States’ harsh response to the attacks of September 11, 2001. Difficulties getting U.S. visas forced Arabs to take their business elsewhere at the very time they were amassing capital from high oil prices. The growing demand for oil from India and China provided a natural alternative, and Gulf-Asia trade burgeoned. Saudi Arabia’s oil exports to China hit US$31 billion in 2008, and China’s exports to the Arab world pulled even with those of the U.S. at about $50 billion, a trend embodied in the sprawling Dragon Mart on Dubai’s outskirts (the largest trading hub for Chinese goods outside the Chinese mainland) and Chinese car dealerships in Damascus.

This new Silk Road is not only slicked with oil, it is technologically enhanced through multilingual B2B websites such as Alibaba.com, which have dramatically lowered the costs of trade between the Persian Gulf and China. And it is reinforced by the migration of labor; at least 10,000 Chinese work on building oil terminals in Saudi Arabia on the coast of the Red Sea. This also means that 10,000 potentially idle young Saudi men are not working at oil terminals, something for which China may eventually suffer political blowback. But for now, China’s baggage in the Arab world remains very light, unlike the Gulf region’s conflicted relationships with the U.S. and other Western nations.

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